U.S. v. ROBERTS

United States District Court, E.D. Pennsylvania

July 22, 2004.

U.S.
v.
ABIGAIL ROBERTS, et al.

The opinion of the court was delivered by: JOHN FULLAM, Senior District Judge

MEMORANDUM AND ORDER

By using the social security number of a very wealthy resident
of Hawaii, the respondents Abigail Roberts and James E. Roberts,
residents of Chester, Pennsylvania, caused the Internal Revenue
Service to mistakenly issue to them a tax-refund in excess of
$2,000,000, which they then proceeded to spend. Among other
things, they deposited $100,000 in their son's bank account in
Hawaii.

Invoking 28 U.S.C. § 1655, the government has brought this in
rem action seeking to establish its entitlement to various sums
which represent the proceeds of the Roberts's misdeeds. The
government now seeks an order requiring the son, Brennan Roberts,
to appear or plead by a date certain. The cited statute provides:

In an action in a district court to enforce any lien
upon or claim to, or to remove any incumbrance or
lien or cloud upon the title to, real or personal
property within the district, wherein a defendant
cannot be served within the state, or does not
voluntarily appear, the court may order the absent defendant to appear or plead by a date
certain.

This statute may be invoked only with respect to "real or
personal property within the district." I therefore, on June 15,
2004, entered an order inviting the government to clarify
"whether any property of Brennan E. Roberts is located within
this district."

In its supplemental response, the government asserts that it is
claiming ownership of or a lien upon the $100,000 which had been
deposited in the West Oahu Community Federal Credit Union; that
"on April 6, 2004, the United States seized $100,000 from West
Oahu Community Bank"; and that "the recovered monies have been
placed in a suspense account of the Treasury Department."

The statute invoked by the government, 28 U.S.C. § 1655,
provides extra-territorial jurisdiction over persons who cannot
be served within the state, but only to the extent of in rem
determinations involving property which is within this district.

The bank account in Hawaii constitutes intangible property,
which is located in its owner's domicile. See G.P. Credit Co.,
LLC v. Orlando Residence, Ltd., 349 F.3d 976 (7th Cir.
2003). Until at least April 6, 2004, respondent Brennan Roberts
was the owner of the bank account in question, and he was and is
domiciled in Hawaii. It follows that, at least until that date, the bank account-more specifically, the money on deposit in
that account-was not located within this district.

The present record, even as supplemented, provides no
information as to the alleged seizure of the bank account by the
government. Presumably, the validity of that seizure would be
subject to litigation in Hawaii, not in this district. Moreover,
the present record provides no explanation as to why, if the bank
account was validly seized, there is any need for the present
proceeding under § 1655.

Quite apart from the answers to the foregoing questions,
application of § 1655 in the present circumstances remains
problematic: even assuming, as the government argues, that money
now resting in the United States Treasury in Washington, D.C.
could be considered to be within this district simply because
some IRS official in Pennsylvania has the authority to draw upon
these funds, I do not believe that the government can, consistent
with due process requirements, remove property from Hawaii to
this district and then invoke the extraterritorial reach of §
1655 to compel a resident of Hawaii to litigate in this forum.

The government may have some further explanation which would
vitiate the concerns expressed above, but no such explanation has
yet been provided. An Order follows. ORDER

AND NOW, this day of July, 2004, upon consideration of the
United States' motion for an order requiring defendant Brennan E.
Roberts to appear or plead by a date certain, IT IS ORDERED:

1. That the motion is DENIED, without prejudice to

(a) litigating the underlying dispute in the District
of Hawaii, or

(b) a properly supported application for
reconsideration of this ruling.

Our website includes the main text of the court's opinion but does not include the
docket number, case citation or footnotes. Upon purchase, docket numbers and/or
citations allow you to research a case further or to use a case in a legal proceeding.
Footnotes (if any) include details of the court's decision.

Buy This Entire Record For
$7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.